UberEats faces logistical challenges in Kiwi market
Wednesday, 19 July 2017
UberEats may face logistical challenges as it expands in New Zealand.
The food delivery service, run using Uber delivery drivers, launched in this country in March.
The fee charged for each delivery varies, but is often about $6 in the central city.
It was revealed this week that McDonald's Greenlane was joining the app, delivering to locations within 10 minutes' drive.
The fast food chain said other restaurants would follow, as other drivers were added to the UberEats roster.
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'By partnering with UberEats, we're able to extend the availability of McDelivery, providing our customers with food they love and new levels of convenience,' said Dave Howse, McDonald's managing director in New Zealand.
UberEats also announced it was expanding into Auckland's North Shore.
But Arvind Tripathi, of the University of Auckland business school, said there were logistical problems for UberEats to overcome.
Running a delivery service required the co-ordination of more parties, which could become challenging, he said.
'They've probably got quite a few things in play here,' he said.
He said, to get the most out of the delivery fee they received, drivers would try to pick up more than one each run. But that meant they had to manage timing issues and co-ordinate a number of locations.
'They have to wait, find parking, all kinds of things. It's not as seamless when you add multiple deliveries it becomes very, very challenging.'
Some restaurants are believed to be reluctant to join the service because of the cut Uber takes from each order - reported to be up to 30 per cent. UberEats did not confirm this.
Tripathi said as the service grew, economies of scale would help.
Sommer Kapitan, senior lecturer of marketing at AUT, said her students reported using the service a couple of times a week, when they could split an order with others.
She said New Zealanders were sometimes reluctant to spend money on things that they thought they could do themselves.
'If we can get in our car and go and get it why would you pay someone $6 to bring you a meal? That could be part of the Kiwi DIY attitude.'
She said UberEats might just need more time to find its foothold in the New Zealand market.
A spokesman said UberEats was pleased with progress in Auckland. 'Since we launched UberEats in Auckland just over a few months ago, we've been overwhelmed by the positive response from local residents who've embraced a new way to get food delivered to their door at Uber speed.'
He said food was usually delivered within 30 minutes. There are now 190 restaurants available on the platform, from 70 when it launched.